Hewitt accused of 'beating up' companies with new regulations

Patricia Hewitt, the Secretary of State for Trade and Industry, was accused of "beating up" companies yesterday as the Government's industrial policy received a rough ride from business leaders at the CBI conference.

Ms Hewitt faced calls for her department to be broken up or even disbanded and legislation such as the Climate Change Levy to be scrapped.

During a hostile 90-minute question-and-answer session the Government's record on taxing and regulating business was attacked along with its "Rip-off Britain" campaign. Delegates also voiced fears that ministers were backsliding on promised reforms of the industrial tribunals system.

One construction industry executive told her: "This Government is all about legislation and bureaucracy. It seems to be all about beating up business rather than working with business."

Another said that with manufacturing industry facing recession and plunging order books, now was the worst possible time to be loading extra regulations on to firms. "Surely this is a time when the Government should be supporting business so we can reduce our cost base and earn a decent penny," he added.

But the biggest cheer of the day came when Digby Jones, the CBI's director-general, attacked the Climate Change Levy, saying companies were being forced to sack employees in order to pay the tax. The Government had chosen to tackle the challenge of global warming by taxing companies because they did not have a vote. "When you hit consumers in their pockets that is when you will make a difference, but the problem is that consumers vote in general elections," he added.

Mr Jones said that the DTI needed to become "more of a champion and less of a regulator" if it was to win the confidence of business.

Dr Vincent Cable, the Liberal Democrats' spokesman on trade and industry, who was sharing the platform with Ms Hewitt, urged the Government to go further and abolish the DTI altogether. "We should be radical and ask whether the DTI should continue to exist. I am not entirely persuaded of whether it is necessary."

Ms Hewitt, who has ordered a root-and-branch review of the department and its role, defended its structure, saying: "If we didn't have the DTI you would be asking us to re-invent it."

Earlier, Sir Iain Vallance, the CBI president, warned company chiefs to be vigilant in case "Old Labour" attempted to introduce anti-business measures while Tony Blair was focusing on the war in Afghanistan.

Opening the annual conference in Birmingham, he said: "There are those who feel we should pull our punches with Government, while the top ministerial team is preoccupied with the war against international terrorism. Our view is quite the opposite. While the top team is otherwise engaged, it is all the more important that the CBI is watchful of the initiatives of others in the New Labour government who, how shall I put it delicately, may be rather less 'reconstructed'."